The Drug War Racket

The Drug War Racket

 

Every great cause begins as a movement, becomes a business, and eventually degenerates into a racket.

Eric Hoffer

The Temper of Our Time

 

The history of Prohibition clearly follows the arc of Hoffer's aphorism.  Prohibition started as a religious and moral movement early in the nineteenth century, it developed into a business in the mid-twentieth century with laws prohibiting drugs other than alcohol.  Finally, the failed War on Drugs has degenerated into a racket. 

Prohibition started as a religious movement early in the nineteenth century when the secular republic of the Revolution turned to religion in the Second Great Awakening.  As it developed, it merged three different religious traditions.  The older Puritans, who had faded a century earlier, bequeathed the idea that society had a moral obligation to closely constrain public conformity.  The Evangelists who arose after about 1810 focused on sanctification, or that each person must lead a godly life to achieve salvation.  By the end of that century they were joined by the practitioners of the social gospel who believed in a mission to better social conditions and society itself.  The common thread holding all three together was an insistence on absolute sobriety.  They were able to impose their religious vision (whichever form it took) on the nation as a whole with the ratification of the Prohibition in 1919.  When Prohibition was repealed, the Dry true believers simply switched their allegiance to the new drug prohibition that developed in the 1920s.  Some even continued giving the same speeches, merely substituting the word “drugs” for “alcohol”.  Even today this absolute moralistic core resonates with many Drug Warriors who still see all drugs (or at least selected “bad” drugs) as evil and who insist on total, nationwide sobriety.

When Prohibition – of both alcohol and other drugs – came into effect in the 1920s, the moral crusade for total sobriety morphed into a business of enforcement.  The commercialization actually started in the late nineteenth century with the opening of inebriation asylums and sobriety clinics.  In the twentieth, they were joined by healers working against drug addiction – in fact the term ”addict” itself grew from those efforts.  They grew from city clinics to institutes trying to break the grip of drugs on their users.  In the mid-30s even the prison system joined in this professional effort with the opening of the federal “narcotic farms” in Lexington and Fort Worth.  These, in turn, became the foundation of the medical profession’s work in the field of drug abuse.  The professionalization of rehabilitation and drug medicine was joined by that of drug policing.  By 1930 both the Prohibition Bureau (later merged into the Alcohol, Tobacco and Firearms agency) and the Bureau of Narcotics (forerunner of the current Drug Enforcement Agency) had become regular civil service bureaus.

The new business of Prohibition slogged along unsuccessfully for a half a century (that’s right: more than fifty years elapsed between the Harrison Narcotic Act and the Controlled Substances Act) before it was supercharged by the War on Drugs and greedily expanded into a racket.  Over a trillion dollars has been thrown to greedy sharks, and drug use is more wide-spread than ever.

From 1970 to 2010 prison population expanded from under 500,000 to over 2,000,000 – most of it from drug arrests.  Private for-profit corporations rushed in to build prisons and operate them under state contracts – and they insured those profits gained with massive campaign contributions and lobbying.  The California Corrections Officers association quickly became one of the richest and most powerful political associations in the state.  Dependence therapy and rehabilitation, a small medical specialty since the 1920s, blossomed into a nationwide industry with major chains of treatment organizations, often run by hucksters and quacks. 

The federal government also poured two massive torrents of money into Prohibition that turned policing into a for-profit racket.   The first was a series of grants, both money and military surplus equipment (which is why even small town police have tanks).  These were primarily based on numbers of arrests, and marijuana arrests are easy to make[1].  The second War on Drugs innovation was civil forfeiture of any assets used in the commission of a crime or acquired through criminal proceeds[2].  Those funds go directly to the police agencies (federal and local) outside of their normal budgetary procedures and constraints.  One Texas sheriff uses part of his forfeited assets to throw regular beer and barbeque gatherings for his deputies.  This process has also allowed major drug kingpins to bribe their way into much shorter prison sentences.

Hoffer’s map traces the trajectory of Prohibition from crusade to business to racket, but it is incomplete.  Every arc comes to an end, but Hoffer gives no clue to what that end may be.  Like a fly ball, it could fall outside the fence for a score or into a fielder’s glove for an out.  Like a cannonball, it could bury itself in the dirt or blow up a fort.  Like a meteor, it could burn out as a fiery streak across the sky or crash into the Gulf of Mexico destroying the dinosaurs and most other life.  The arc of Prohibition must end.  It is up to us to make sure its end comes quickly and does as little harm as possible.

 

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[1] See my earlier “Policing for Profit”.

[2] Soon to come on this blog: “Robbery in Blue”.

Cease Fire?

Cease Fire?

 

Has the Obama administration declared a cease fire in the War on Drugs?  The evidence surely points in that direction.

In 2008, Candidate Obama made several remarks suggesting that he intended to liberalize marijuana laws.  Many of his supporters became critical when most of his first administration passed without action on these statements.  But toward the end of that term the Justice Department issued the Ogden memorandum, stating that it would not prosecute medical marijuana users or their caregivers complying with state medical marijuana laws.

After the 2012 elections, Obama was faced with additional challenges in drug law enforcement.  Washington and Colorado both passed initiatives legalizing marijuana sales and possession, new states recognized medical use of marijuana (raising the total to twenty-one jurisdictions doing so), and congressional sequestration dramatically reduced the funds available for law enforcement.  Eight months passed before the administration responded to those events, but when they came, they were sweeping[1].

The first break was an announcement by Attorney General Holder that he was instructing federal prosecutors to draft charging instruments (complaints and indictments) to avoid imposing mandatory minimum sentences in non-violent drug cases.  He supported this instruction by showing the immense burden these lengthy sentences placed on the prison system.

Toward the end of August, a memorandum from Asst. A-G Cole announced that the federal government would abstain from proceeding against state marijuana laws and their implementation if those laws complied with eight standards articulated in that memorandum.  To a large extent, those standards provide guidelines for other states wanting to enact similar laws.  Senator Patrick Leahy convened a hearing by the Judiciary Committee to inquire about this memo.  The hearing lasted one day, Cole was the only federal spokesman to appear, and only one witness – a professional anti-drug advocate with financial interests in the rehabilitation industry – was opposed to the action taken by the government.

On the same day the Cole memo was released, A-G Holder announced he would be conferring with federal bank regulators to find some way for businesses in compliance with these new state laws to use normal commercial banking services.  Up until now the government has used the threats against banks under the Money Laundering and RICO/CCE laws to prevent them from doing business with marijuana enterprises legal under state laws.  Forcing these enterprises to operate on a cash basis not only made them hard to manage, it also made them into targets for robbery.  About six weeks after Holder’s announcement, Bank of America has agreed to be a depository for all marijuana taxes and license fees collected by Washington State.  Since large banks operate very cautiously, this action by BoA suggests some accommodation by the federal bank regulators in line with the Holder announcement.

The other collateral attack used by aggressive federal prosecutors against state-legal marijuana has been to use asset forfeiture laws (CCE) against landlords leasing property to marijuana businesses.  If an asset – including real property – is used in the commission of a federal crime, that asset may be seized and forfeited to the government.  In a sense asset forfeiture is the government’s biggest stick against marijuana businesses: if landlords are scared away from leasing to them, legitimate businesses are reduced to being street dealers.  From this viewpoint, the announcement a few days ago by one of the most aggressive U. S. Attorneys in California dismissing four large asset forfeiture cases was a bombshell.  It took a major weapon out of play and put it back on the shelf.

One executive voice has been strangely missing from this flurry of federal actions.  The Office of National Drug Control Policy, the agency designated by Congress to set and articulate the government’s drug strategy has said almost nothing about these developments.  In fact, except for its required annual report, it has said nothing of substance.

In summary, over the last two months, the administration has:

·         Decided not to use mandatory minimum sentences,

·         Acquiesced in state marijuana legalization laws,

·         Announced a review of banking regulations to allow state-legal businesses to have access to banking services (and Bank of America has entered the business),

·         Dismissed a series of large, high-profile asset forfeiture cases.

Combining these four major reductions in drug law enforcement with the eight month delay between the 2012 election results and their announcements leads to the conclusion that the administration has declared a cease fire in the War on Drugs – at least in the War on marijuana.  If this cease fire continues for another thirteen months, the next round of elections should usher in a new group of legalizing states, possibly four or five more.  If this does result, the cease fire will become a fait accompli: an irrevocable accession to state-by-state legalization.

Why do I characterize this as a cease fire instead of a truce or even a surrender?  The problem is that the administration can only decide how to pursue the War on Drugs; it cannot decide on its own to end the war.  Only congress can end the war, and it has shown no inclination to do so.  When will congress admit that they have lost the war and repeal Drug Prohibition?

One hopeful sign has been the silence from Capitol Hill.  No elected Drug Warriors have been screaming for punishing the legalizing states; no committee hearings have pushed stricter enforcement.  The silence is deafening.  One more election may shift the congressional balance of power and change this cease fire into a peace treaty.

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[1] For a running account of these developments, see my earlier “Whatcha Goona Do?”, “Six Months”, “They Blinked”, “Ogden and Cole”, and “Parsing the Cole Memo”.

The Range of Legalization

The Range of Legalization

I originally wrote this for a group working to modernize the marijuana laws in Texas.  But as I was writing it, I realized that most of it is general enough to apply anywhere.  The main thrust is that a reformed law will have a broad and beneficial effect on many aspects of society.  So, ignore the Texas-specific parts and use those parts that apply to your state.

 

Selling Marijuana to Texas

After reading Grieder’s “Hot, Wide, Cheap, and Right” that I recommended last week, I started thinking about how we try to sell marijuana reform to both the Lege and fellow Texans.  And I have concluded that we need to change the main thrust of our argument.

Most of the time, we have stressed the negative: “Quit putting people in jail for marijuana”; “don’t come between a patient and a doctor.”  We can’t E-lim-i-nate the negative altogether, but we can soft=tone it while we AC-cent-u-ate the Positive:  We can talk about the good marijuana can do for Texas.  We can switch to the positive by talking about six things: commerce, agriculture, energy, medicine, technology, and higher education.

COMMERCE:  The growth in commerce will be astonishing.  Even the smallest town will have at least one retailer, who rents or owns a store and may have employees.  Packagers and distributors will supply them; and they in turn will need truckers, label printers, and container makers.  Those providing marijuana edibles need commercial kitchens, cooks, and display areas.  Hemp clothing, food and cosmetics will continue to be sold, but they will probably be made from locally grown hemp.  A glance at the display next to the cash register in any convenience store will show how the market for accessories will thrive

AGRICULTURE: Texas has always been known for its vigorous agricultural sector.  Marijuana can expand agriculture in three ways.  Marijuana can be a field crop, much like the vegetables grown in many parts of the state, or it can be a specialty product grown in greenhouses.  Hemp, with its stalks, is a fiber crop to challenge cotton or wool, or it can be grown for its seeds and oil.  For many hemp products, the change will be that they are made from locally grown hemp instead of imported.  Most of these farmers will hire laborers.  The farm supply industry will sell them seeds, fertilizer, and pesticides; greenhouse growers will also need high-end environmental control and hydroponic systems.  Farm machinery manufacturers will quickly provide equipment for hemp cultivation and harvest, and marijuana harvesting gear will soon follow.

ENERGY:  The energy business has been the keystone of Texas industry for a century.  Recently it has moved past sole reliance on oil to add natural gas and, more recently, renewables like ethanol and wind power.  Hemp can provide renewable fuel.  Prototypes have been demonstrated both for biodiesel from hempseed oil and for cellulosic ethanol from hemp stems and leads.  Both of these need significant development before emerging as competitors for petroleum fuels, but the established energy companies have the knowledge, technology, and resources to do that development and have the marketing outlets and incentives to do so.  The close geographical and transportation ties between these industries and the envisioned Texas hemp cultivation should prove synergistic.

MEDICINE:  Although therapeutic use of marijuana has become well established over the last forty years, federal prohibition has virtually squelched basic research.  Many fundamental questions of both physiology and pharmacology remain unanswered.  Texas contains some of the world’s leading medical research institutions.  The Houston Medical Center, including M. D. Anderson, is a good example of the resources available to pursue this research and to advance treatment if Prohibition is ended.

TECHNOLOGY:  Most of the developments discussed above call for technological improvements on the way to market.  Agriculture needs tools for tillage, harvest, and product processing.  Energy needs process and chemical engineering to move from prototype to commercial production and distribution.  Medical research has barely begun.  These technologies – agriculture, fuel and chemical processing, medical technology, and transportation – are those in which Texas already excels.  Legalizing marijuana would play into Texas strengths and allow it to build a dominant position in a new industry.

HIGHER EDUCATION:  In the same way, Texas higher education is well placed to advance this new industry.  Texas A&M and Texas Tech are at the fore in agricultural science and technology.  Many Texas universities have outstanding programs in energy and process engineering and in medical science and engineering.  They, too, could build on their already proven abilities.

This brief outline shows ways in which legalizing marijuana could broadly benefit all Texans: that it is not just coddling stoners or excusing junk medicine.  However, my perspective, while broad, lacks depth.  I invite those with more knowledge than me (not a very high standard) in agriculture, economics, engineering, and business to expand these sketchy overviews and provide some substance.

If each of my little paragraphs could be expanded to a few pages of solid detail, he result would be a pamphlet capable of convincing large numbers of people.  A press run of a thousand would supply every elected official, state and federal, every university president, and the major state news outlets.  Placement on the Web would make it available to millions.

 

Is this a project we can do?  Who will join me on this?

Good Golly Miss Molly

Good Golly Miss Molly

 

My favorite recreational drug has been thoroughly maligned in the press recently.  Two or three young people have died at music events, apparently of overdoses of a “new” drug known as “Molly”.  Molly was claimed to be an unusually pure version of the fad club drug of the 1980s and ‘90s: Ecstasy.  As is usual with drug stories, these reports were false and hysterically overdrawn; and they were false and hysterical in ways that repeat many other drug Prohibition tales.

But first comes a brief explanation of the drug known as Ecstasy.  Ecstasy (Eve, E, or X) is methylenedioxy-N-methamphetamine (usually known by the abbreviation MDMA).  It is a fairly old chemical, discovered in the 1910s, at about the same time as the related compound methamphetamine.  MDMA was ignored until the 1970s when Alexander Shulgin examined it as part of his extended study of psychedelics.   Psychotherapists were quick to pick up on its value and were using MDMA in couples therapy. Grief counseling, and end-of-life preparation.  After the DEA placed the drug in Schedule I, the use continued in other countries, and it is completing Stage III clinical trials for FDA approval now for use in treating PTSD.

The same effects of MDMA that make it useful for therapy also make it attractive as a recreational drug – increased empathy, expansive and relaxed mood, and heightened sensation (combined these features show why it is frequently called the “hug drug”).  Additionally, its physiological effects preclude addiction.  Since it depletes the brain’s supply of serotonin, additional doses have no effect.  By the early 1980s it was common in dance clubs in Dallas and Austin.  When the clubs themselves began selling it to their patrons and accepting credit cards for payment, the DEA rushed into an emergency scheduling procedure and placed MDMA in Schedule I.  In the meantime, use of MDMA spread to raves – large (thousands of attendees) all-night dance parties, all across the U. S. and over to Europe.  The Netherlands became the center of its manufacture.  This explosion in use was occurring while the DEA was rapidly enforcing its new powers against the drug.

Soon reports began appearing in the media alarming over Ecstasy “overdose” deaths.  Investigation revealed that those deaths were from heat exhaustion brought on by hours of dancing in close, overheated quarters without sufficient hydration.  Since MDMA does slightly impair the body’s heat regulation, it was a slight contributory cause of these deaths, but as the dance venues responded by providing cooling-off areas and access to water and as users learned the importance of hydration, these deaths disappeared (ironically, at least one subsequent death was attributed to water overdose – yes, one can kill himself by ODing on water – by a young woman who took the warnings too seriously.  During the same time period, more high school and college football players died of heat exhaustion during practice than died after taking MDMA.

As the DEA began enforcing its new ban on MDMA, the overt quasi-legal manufacturers in the Netherlands were suppressed and replaced by myriads of small, shady. Fly-by-night operations.  Counterfeits and adulterants became frequent, methamphetamine and DXM, the cough syrup ingredient used by many children as a weak hallucinogen, were among the most common[1].

The story now circles back to Miss Molly.  When follow-up stories examined the Molly scare, they found the incidents had nothing to do with MDMA.  Molly was a distinct synthetic chemical named ME-2, not related to MDMA except by marketing devices; and the deaths had nothing to do with MDMA.

The substitution of lethal ME-2 for benign MDMA repeats a sad dreary refrain recurring throughout the history of Prohibition.  During the 1920s, thousands died and many thousands were sickened or maimed by jakeleg and sterno or by adulterated alcohol (intentionally denatured by the government with known poisons).  Many – if not most – of the heroin deaths reported during the last century have been caused by adulterants or substitutions (one notorious epidemic was caused by the substitution of fentanyl for heroin).  Marijuana users know what has happened when dangerous chemicals have been marketed as “synthetic” marijuana.  Black markets have no chemical control; street-corner pushers are not inspected by the FDA.  When Prohibitionists are confronted with these predictable and sure results of their imposed morality, they merely shrug and say, “They did it to themselves.  They should have obeyed the law and abstained.”  The alcohol Prohibitionists even forced the government to use a more toxic denaturant so that drinking would be even more deadly.

The Molly incidents also renewed a frequent Prohibitionist propaganda ploy.  Molly was described as a purer and stronger form of MDMA, and therefore more deadly.  The story was first told about heroin being stronger and more deadly than morphine.  These doom-sayers proclaimed crack as a more deadly and addictive form of cocaine.  Meth is decried as much worse than its urbane brother, amphetamine.  And of course, their current cry is “It’s not your grandfather’s marijuana.”  Fear is apparently a classically addictive substance: its compulsive users exhibit tolerance.  They need larger and larger fixes to get the same result.

The Molly stories did not reveal a threat either to the youth of the nation or to public health.  Both of those could easily be achieved by legalizing and regulating MDMA.  What they did was provide another sad chapter in the irrational and destructive history of Prohibitionism.  Now is the time to replace myth and hysteria by a factual accounting of what is really happening.

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[1] PERSONAL DISCLAIMER:  MDMA is my favorite recreational drug.  For several years in the mid-90s I used it often – about once or twice a month.  I stopped when counterfeits became so common that the risk of use was simply too high.

Policing for Profit

Policing for Profit[1]

 

Does your local police force have a brand new armored personnel carrier?  Are they all equipped with Kevlar vests and helmets?  Where did their new helicopter come from?  Are they talking about flying drones above your back yard?

And, most important, where did they get the money for all of this stuff?  It was not voted from local tax revenues by the City Council.  It was not allocated by the mayor from city funds.  It did not even come from the legislature in the state budget.

Instead, those goodies or the money to pay from them came directly from the federal government to the police force, bypassing all local governments and their oversight of police activity.  That’s right: the feds have bought your local police and didn’t even ask the mayor’s permission first.

And if they’ve bought them, they can tell them what to do.

As the federal government has escalated the War on Drugs over the last forty years, it has co-opted local police forces to do the dirty work for them.  They have used grants of both money and equipment to do this.  Over time three major grants have been initiated and favored police agencies have also been given access to Department of Defense surplus equipment: that’s where all those APCs AR-15s, and Kevlar vests have come from.

(The Rise of the Warrior Cop by Radley Balko gives a good history of the grant programs and their uses.  His main interest in this book are organizations like SWAT teams and their uses, a subject that should also be of great concern to drug law reformers.)

However, these grants are not unrestrained; they may be used for only three purposes.  The may be used primarily for local enforcement of drug laws and they are used to fund multi-jurisdictional drug task forces.

The third use is to reimburse local prosecutors, courts, and jails for the prosecution of drug offenses against defendants arrested by federal agents by for offenses deemed too minor for federal prosecution.  However, with recent federal budget cuts, this reimbursement has stopped.  In several sparsely populated Texas counties near the Mexican border, sheriffs and district attorneys are now refusing to file state charges against these federal arrestees, simply releasing them.

Local police can’t get these federal grants just by asking for them.  They must earn them.  And the way they earn them is by running up their statistics on the FBI crimes reports, reports based solely on the number of arrests.  Nationwide about half of all arrests are for drug offenses and more than half of those are for marijuana; around 800,000 arrests each year for simple possession.  Simple possession arrests are made by single cops without extensive preparation and little follow-up (but the cops love them because the routine of arresting and booking the suspect and appearing in court makes a lot of extra-pay overtime).  In contrast, a rape or murder may take many days for a team of detectives, using many forensic science tests, a week or more to solve; and an major financial crime can occupy dozens of specialized investigators months or even years to unravel.  To which crimes will a police chief trying to sell arrest numbers to the feds devote his resources and manpower?  Meanwhile violent and destructive law-breaking continues.

 Probably the most destructive feature of policing for federal dollars is the funding of multi-jurisdictional task forces.  These dollars from Uncle Sam pay for the formation and operations of police forces focused on drug law enforcements composed of elements from local, state, and federal police agencies.  These task forces operate outside the normal oversight and control of the local governments that provide the officers comprising the task forces.  Consequently, they are hotbeds for over-reaching and unlawful, abusive behaviors.

Two different tasks forces in Texas acted so outrageously that the state legislature passed a statute forbidding the use of state funds for these groups. (I’m not picking on Texas – it’s no better or worse than other states – I just know it better.)  In the ‘90s, two Texas task forces made the news.  In Tulia, a small town in the Panhandle, an undercover task force cop arrested about forty people for dealing cocaine – about ten per cent of the black population of the town.  After a few were convicted on the sole testimony of the cop and sentenced to twenty years or more, most of the others pled guilty.  Ultimately, that cop’s scheme fell about, he was convicted of perjury, and those convicted were pardoned[2].  At almost the same time, a task force investigation in Hearne, a small town near Waco, that had arrested over twenty people, mainly black, fell apart when it was revealed that they were all based on false reports from an informant who was both working out a plea deal and receiving money for his tips.  The common factor is that, in both situations, the task forces were not operating as a part of a regular police force subject to the oversight and discipline that these organizations provide[3].

When the police work to earn federal dollars instead of working to preserve public safety, everyone’s life becomes less secure, crime flourishes, and corruption spreads.  Now is the time to insist that the federal government stop buying police to join the War on Drugs and to tell your local police to protect the public, not prowl the beat for the profit in federal dollars.

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[1] I got the title from Ann Lee.  Ann is an octogenarian, a stalwart of the Drug Policy Forum of Texas and a founder of RAMP, Republicans Against Marijuana Prohibition.  And she’s also the mother of Richard Lee.  Hanks, Ann! 

[2] For more on the Tulia story, read Taking Out the Trash in Tulia, Texas by Dr. Alan Bean.

[3] For more on snitches, see my earlier “Informants: Deal with the Devil”.

Parsing the Cole Memo

Parsing the Cole Memo

 

  The August 28 memo of Asst. A-G Cole stating the conditions under which the DoJ will refrain from taking action against state marijuana laws provides the criteria which any new statute must meet, both in insulating new marijuana laws, but in structuring those laws to protect their citizens from federal prosecution.  Since several states are now discussing following the lead of Colorado and Washington in legalizing marijuana on the state level, understanding that memo is essential for their actions.  This memo will briefly discuss the implementation of those eight criteria.[1]

  The criteria, restated in brief are:

1.    Prevention of access by minors;

2.    Prevention of DUI;

3.    Prevention of participation by organized criminal gangs and cartels;

4.    Prevention of trafficking of marijuana to other states;

5.    Prevention of the use of violence and firearms in marijuana transactions;

6.    No allowance of other controlled substances;

7.    No possession on federal property;

8.    No growth or preparation on federal property.

These criteria create most, but not all, of the constraints imposed on drafting a new law.  This memo discusses how to comply with them.  However, drafters must change a mindset acquired through decades of working under a Prohibition scheme.  Until now, marijuana has been assumed to be contraband, legislation permitting its otherwise forbidden possession must be tightly drawn, and that all those engaged in its commerce are criminals (actual or potential) and must be under constant supervision.  Under the new guidelines, legislators can be more relaxed.  They may assume that those engaged with marijuana are lawful business people who conduct themselves accordingly and legislation should be drawn to regulate normal commerce, setting the borders for that behavior, not strict containment more proper for controlling nascent criminals.

Access by minors: Access by minors should be approached on both the demand and supply sides.  A minimum age for purchase (I prefer 18 instead of 21, see my earlier “Marijuana and the Young”) combined with requirement of an ID for purchase should be enough control on demand.

  Several techniques are possible on the supply side.  The simplest would be to copy the cigarette market and ban vending machines and self-service retail displays.  Methods of licensing up-chain suppliers and inventory controls are possible.  A portion of tax revenue could be devoted to science-based drug education.  Criminal penalties for sales to minors could be imposed.  The real problem here is selecting from a broad menu.

   A major consideration should be that no minor should be involved in the criminal justice system for possession or use of marijuana.  DUI and commercial quantity sales by those over 16 would probably be exceptions to this principle.

DUI: The current DUI statute will probably pass muster.  I, personally, would like to require the state to research and develop scientifically verified measurements for impaired driving performance, both biochemical and behavioral (and I don’t mean just randomly set blood, urine, or breath levels of metabolites).  Behavioral methods should be based on experimentally derived protocols, administered through scored checklists and recorded on video.  Dash cams are almost universal in patrol cars now.  I would devote a portion of any marijuana tax and license revenue to the project and stipulate that the new tests replace current ones in no more than five years.

Criminal gangs and Cartels This criterion is the most puzzling one.  If the federal standards – CSA, RICO, CCE – are used, the Gulf Cartel and Harborside dispensaries with thousands of patients and millions in revenue are indistinguishable.  A common sense definition would suggest three distinguishing characteristics: the criminal organization regularly engages in crimes other than drug transactions; they deal in drugs other than marijuana; and they often resort to violence.  With that assumption, the best way to satisfy this condition is to use a moderate licensing scheme from seed to sale.

  Licensing should include both the people engaged in the enterprise and the premises on which marijuana is grown or propagated.  Licensing should be relatively simple and inexpensive.  Onerous licensing will encourage avoidance and illegal enterprises.  Enterprise and employee licensing should require a criminal background check and proof of state residency.  It should include all owners and investors as well as operators.  An argument can be made that low-level employees need not meet those licensing requirements.  Any site on which marijuana is grown or propagated should be licensed in the name of a licensed operator, and that license should include the location and size of the property, proof of the operator’s ownership or lease, and permission for the state to enter and inspect.

  Inventory control, accounting, and reporting from seed to retail sale should be required.

  Hemp licensing should be less stringent.  The license should be limited to a specific location, be accompanied by a purchase agreement to buy all seeds from a producer whose seeds have been certified to be below a specified THC level by a recognized independent tester, and grant permission for the state to enter and collect sample for testing during the growing season.  Each year at harvest, the license holder should have to submit a THC test of the harvested crop.

Interstate Trafficking:  This may be the easiest standard to comply with.  The licensing and inventory controls outlined above together with a provision criminalizing out of state sales should be enough.  A quantity limit on individual retail sales (maybe 4 ounces) would also help with this issue.

Violence and firearms:  The act of legalization itself will accomplish this goal (remember the Capone to Budweiser transition?).  Perhaps an additional penalty on the use of firearms in any crime involving the commerce in marijuana could be added, but that would mainly be symbolic since armed robbery is already a serious felony.

Note that all three of the above criteria could be met more easily if, as A-G Holder has suggested, federal banking regulation is modified to allow routine banking by licit marijuana businesses.  A requirement that all commercial marijuana transaction be bank moderated or by electronic transfers would both eliminate the targets for robbery and provide audit trails to insure compliance.

Other controlled substances:  This standard primarily calls for inaction.  All indications, including results in The Netherlands and Portugal, are that separating the markets for marijuana and hard drugs weakens the sale of hard drugs.  The need is to be sure that new legislation does not, directly or by implication, relax laws controlling other drugs.

Possession on federal property: This is the most confusing of the Cole criteria for two reasons and the one over which the states have little control.  It is confusing because of the wide range in types of federal property and because the evidence shows that no real problem exists. 

Property ranges from the vast tracts managed by the Bureau of Land Management and the forest service, to National Parks – from Yosemite and Yellowstone to single buildings in urban centers, to military reservations, to post offices and courthouses.  Is Cole talking about thousands gathering for Burning Man or a postage stamp buyer who incidentally has an eighth-ounce in his pocket?

Data show that, since 2009, the Park Service has issued slightly over 27,000 citations for possession spread over the millions of park visitors.  This number is so small as to suggest no problem exists.

Be that as it may, state laws can have little or no effect on the issue.  It will remain a federal problem.

Production on federal property:  The problem of destructive outlaw growers on federal land will be solved simply by the act of state legalization.  Outlaw growers in remote locations cannot compete with overt legal growers because of their inherent inefficiencies and structurally higher costs.  Competition will quickly drive them out of business.  Further, a thoroughly, but lightly, regulated legal structure, as outlined above, will prevent their illegal production from having access to market.

Other Considerations

  In addition to the Cole criteria, some general considerations arise.

Taxation: Should any taxes beyond the general sales tax be imposed on marijuana, and if so, at what levels of the production-distribution-sales chain?  Should local governments be allowed to impose their own taxes?  Should any proceeds of taxes or licensing fees be dedicated to the costs of administering this law, to education about marijuana, to treatment or rehabilitation of problem users, or to any other special users?  What about medical users (see below)?

  Tax rates (which should be set on percentage bases, not flat dollar amounts) must be low enough to prevent black markets from being created by those wanting to profit through tax evasion.  Tax considerations must be based on the realization that marijuana as a legal commodity will sell for prices significantly lower than as contraband.  A conservative estimate is that it will sell for less than 10% of the current price.

Medical Users: Will people using marijuana need any special regulations under a scheme of general legality?  One possibility is that sales to one bearing a signed recommendation from a licensed health professional (or an ID based on such recommendation) be exempt from sales tax, just like other medications are.

Extracts and Derivatives: Do derivatives like hashish, resin, oils, elixirs, e-cigarette capsules, etc. require special considerations or limitations? Labelling?

Edibles: Do food products containing marijuana or derivatives come under normal food processing and marketing regulation?  Do they need additional regulation?

Hemp: Does the production of large-scale hemp, which is not psychoactive, need a different, probably less restrictive, regulatory scheme?

*****

  The Cole memorandum actually sets out an outline for a practical, enforceable marijuana statute. This memo sets out methods to determine how to make a proposed marijuana statute conform to the Cole memo and, hopefully, induce federal abstention if it is enacted.  Now the states must start to structure the laws themselves.

 

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[1] This essay is based on a memorandum I prepared for an informal group drafting a proposed bill to be presented to the Texas legislature in the 2015 regular session.

Ogden and Cole

Ogden and Cole

 

For the second time in two years the Department of Justice has issued a memorandum outlining how it will enforce the federal laws forbidding distribution and possession of marijuana.  The question is whether these indicate a real change in policy, a response to tight budgetary constraints, a temporizing move, or just a publicity stunt.  The best analysis is that they show an actual change in policy.

Roughly two years ago, with about fifteen states (now up to twenty) having adopted medical marijuana laws  and very different federal enforcement tactics in the various states, the Department of Justice tried to clarify and unify its response to those laws.  In a memorandum by Assistant Attorney-General Ogden, it stated that the government had no interest in prosecuting patients or their care-givers acting in conformity with state laws, but would continue to vigorously pursue those connected with criminal enterprises or operating for profit.

The Ogden memo had radically different results in different states.  In New Mexico and Colorado, with tightly controlled distribution systems, the U. S. Attorneys took virtually no actions, allowing the state systems to function.  But in Montana and especially California, where the state laws were not comprehensive in regulating production and distribution and many local governments were resistant to implementation, some of the U. S. Attorneys became aggressive in collateral attacks on growers and distributors.

Several things have occurred since the Ogden memo was issued.  First, the aggressive actions of two of the four California USAs aroused substantial public opposition and resentment while they did little, if anything to disrupt the access of growing numbers of Californians to medical marijuana (what they may have done to large-scale marijuana businesses is another story).  Then several more states, at an increasing rate, approved state laws recognizing medical marijuana.  The number of states is now up to twenty, containing around thirty percent of the national population.  

While the task of enforcement got larger and the methods used prove to be ineffective, resources for enforcement shrank.  The Congressional budget sequestration imposed drastic across the board cuts on all federal agencies, including the Department of Justice and its subsidiary departments including the DEA, Bureau of Prisons, U. S. Attorneys, and public defenders.  These budgetary constraints were a large part of the reason that Attorney-General Holder announced that the Justice Department would discontinue the practice of imposing mandatory minimum sentences for non-violent drug cases.

In 2012, Colorado and Washington, both states with existing medical marijuana laws, passed referenda legalizing the sale and possession of marijuana in those states.  Since those new laws were inconsistent with the federal law still controlling in those states, many anxiously awaited the federal reactions to these laws.

One set of voices was conspicuously absent from the discussion of these issues.  From the 1970s into the 1990s, Congress had consistently tightened the federal drug laws, making them even more draconian.  Yet, when the states began challenging its authority, first with California’s medical marijuana referendum in 1995, Congress did nothing.

The Justice Department responded to these events in a memorandum from Assistant Attorney-General Cole in August, 2013.  The Cole memo repeated the Ogden statement that the federal government had no interest in prosecuting individual users and low-level dealers.  It then stated that it would refrain from action against the Colorado and Washington law (and by implication, laws later passed by other states) if their fulfilled eight stated criteria.[1]

These criteria should also serve as a restraint on some U. S. Attorneys who have used the vague generalities of the Ogden memo as a hunting license to go after the higher levels of the medical marijuana distribution chain in some states.  This comment is not a criticism of the Ogden memo.  It was attempting to establish guidelines for acting in the unknown – and unknowable – future of a nascent industry.  Vague generalities were the best that could be done at the time.

Within hours of the release of the Cole memo, A-G Holder announced he would be working with federal banking regulators to find some method to allow banks to extend normal banking services to regulated marijuana businesses that have to operate under money-laundering statutes, RICO and CCE statutes and FDIC insurance requirements.  He expressed two reasons for this action.  Requiring these enterprises to operate on a cash only basis makes them targets for robbery, exposing the public to increased violence; and use of routine banking services creates an audit trail that can prevent diversion of receipts to criminal organizations like the Mexican Cartels.

After the Cole memo was released, Sen. Patrick Leahy called a hearing of the Senate Judiciary Committee to look into it, saying that it was time to put drug control on a more reasonable basis.  Of those called to testify, only one raised even tepid objections to the actions taken by the Justice Department.

Taken together, the Ogden and Cole memos and the circumstances surrounding them show a major change in the government’s thinking on marijuana regulation.  Is that change merely a passive recognition of federal impotence?  An attempt to shift responsibility to the states?  Or the first step to a major reform of federal drug law?  At this early stage, only a fool would try to predict the exact path that will be followed, but one thing is certain.  Federal drug law has taken a large, and irreversible step toward drug law reform.

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[1] I intend to post an analysis of these criteria in a few days.